Bitcoin 'time to buy' ad banned in the UK for being irresponsible
LONDON — An advertising campaign telling people in the U.K. “it’s time to buy” bitcoin has been banned by the nation’s advertising regulator for being irresponsible and misleading.
Posters for cryptocurrency exchange service Luno — shown across the London Underground network and on London buses this year — contained a cartoon image of a bitcoin with the words “If you’re seeing Bitcoin on the Underground, it’s time to buy.”
The Advertising Standards Authority (ASA) said Wednesday that the ads must not appear again in their current form and that they failed to highlight the risks.
It comes a week after the price of bitcoin collapsed by 30% in a single day, leaving many retailer investors who had bought bitcoin significantly out of pocket. It also comes two weeks after the Bank of England governor said cryptocurrency investors should be prepared to lose all their money.
The watchdog said that it received four complaints concerning the ad. Three of them were from people who believed the ad failed to illustrate the risk of the investment and accused it of being misleading. One said the ad took advantage of consumer’s inexperience or credulity.
“We considered that consumers would interpret the statement ‘it’s time to buy’ as a call to action and that the simplicity of the statement gave the impression that bitcoin investment was straightforward and accessible,” the ASA said.
The regulator added, “bitcoin investment was complex, volatile, and could expose investors to losses and considered that stood in contrast to the impression given by the ad, that investment was simple and conventional.”
“For that reason, we concluded that the ad irresponsibly suggested that engaging in bitcoin investment through Luno was straightforward and easy,” it added.
It has told Luno to ensure that its future marketing communications make “sufficiently clear that the value of investments in bitcoin was variable and could go down as well as up.” They must also highlight that Luno and the bitcoin market are unregulated.
Luno has agreed not to share the ads in their current form again and pledged to ensure that future ads carry an appropriate risk warning, the ASA said.
Luno, which is part of a group that also owns the CoinDesk website, did not immediately respond to CNBC’s request for comment.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said in a statement that regulators are becoming increasingly concerned about the risks that cryptocurrency investments can pose to consumers.
“Cryptocurrencies are very complex, and are highly difficult to value, not least because the rules of the game can change so quickly,” she said.
Last week’s crypto sell-off came after authorities in China and the U.S. moved to tighten regulation and tax compliance on cryptocurrencies. The sell-off was a major reversal for the cryptocurrency, which appeared to be gaining traction among major Wall Street banks and publicly traded companies.
Tesla CEO Elon Musk, who helped fuel bullish sentiment when his company announced in February it has bought $1.5 billion of bitcoin, delivered a blow earlier this month when he announced that the automaker had suspended vehicle purchases using the cryptocurrency over environmental concerns.
Bitcoin’s price was boosted this week after Musk said he’d been talking to bitcoin miners about how to make the cryptocurrency more environmentally friendly.
The price of bitcoin at 3:49 a.m. ET was $40,445,17 and it’s climbed around 4% in the last 24 hours, according to CoinDesk.